2024 (8) TMI 93

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....account of Management Services (Royalty services), bank guarantee services etc. The appellant filed their replies and responded for the queries raised by the audit team. On 13.10.2011 the Show Cause Notice was issued demanding the Service Tax under the following heading. Subsequently one more Show Cause Notice was issued on 17.10.2012 for the following amounts: Appeal No.ST/75036/2013 Sl No. Service Tax Demanded on Service Tax including Cess Period 1. Management Consultancy Services 1,44,96,485.00 January 2008 to December 2010 2. Intellectual Property Services 1,30,28,482.00 October 2004 to December 2010 3. Banking & Financial Services 3,39,652.00 January 2006 to December 4. Job Work Charges under Business Auxiliary Services 3,15,625.00 April 2009 to March 2011 Appeal No.ST/76479/2018 Sl. No. Service Tax Demanded on Service Tax including Cess Period 1. Management Consultancy Services 4,32,156.00 January 2011 to March 2012 2. Intellectual Property Services 29,52,461.00 January 2011 to March 2012 3. Job Work Charges under Business Auxiliary Services 4,36,398.00 April 2011 to March 2012 2. After due process, the Adjudic....

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....company at Switzerland. The amount so paid for the Baddi unit has been accounted for in the Profit & Loss account along with the Service Tax paid. In such a case it cannot be taken as any services provided by the Baddi unit or vice versa. Since they are all part of the same unit, even if it is assumed that any service is involved, that would amount to self-service only wherein no Service Tax liability would arise. Therefore, he submits that even on this count, the confirmed demand of Rs. 1,44,96,485/- for the period January, 2008 to December, 2010 and Rs. 432156/- for the period January, 2011 to March, 2012 are required to be set aside on merits. 5. In respect of the confirmed demand under the heading of Intellectual Property services (IPR), the Ld. Consultant submits that the IPR services became exigible to Service Tax with effect from 10.09.2004 only, whereas the Agreements with the holding company were signed on 13.09.1992 and 10.08.2004. In terms of this Agreement, the appellant has been paying Royalty charges to the holding company for the goods manufactured and cleared by them every year. He takes us through the Agreements annexed page no. 145 to 207 and 207 to 215 of the Ap....

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....ished goods were cleared after job work to Joka and Baddi units. The Joka unit clears the goods on payment of Excise Duty and the Baddi unit enjoys the duty exemption. Therefore, the job work has resulted in the manufacture of a product. Therefore, he submits that there is no necessity for the appellant to pay any Service Tax under the heading Business Auxilliary Services. Accordingly, he submits that the confirmed demand of Rs. 3,15,625/- for the period of April,2009 to March, 2011 and Rs. 4,36,398 for the period of April, 2011 to March, 2012 is required to be set aside on merits. 8. In respect of banking and finance services, the Ld. Consultant submits that the holding company arranges for working finance for the subsidiary units including the present appellant located in India. For the banking charges incurred by the company, towards the bank guarantees given on behalf of the Indian company, they charge this amount on the appellant. This amount is paid by the holding company towards banking charges incurred abroad and they are getting reimbursement from the Indian company. This amount is not towards any services rendered by the Foreign company to the Indian company, but the amo....

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....ed before us that the appellant has been recording the Service Tax pertaining to the Management Consultancy services amount paid to their holding company. Payment were made towards expenses incurred by the Joka unit as well as by the Baddi unit. In case of Baddi since they are not in a position to claim the Cenvat Credit. The Service Tax amount and the Management consultancy amounts have been apportioned to their expenses account. This is no way allows the department to come to a conclusion that the appellant provided any service to the Baddi unit. Therefore, on this count itself, the confirmed demand of Rs. 1,44,964,85 is required to be set aside and we do so. 13. Further he also see force in the appellant's arguments that the Baddi unit, Joka unit the appellant are one and a same entity. In such a situation there cannot be a case of service being provided by the Appellant to the Baddi unit towards Management consultancy. Even if it is taken hypothetically that in services have been provided, it will amount to self service and therefore, no Service Tax liability would arise. Therefore, we set aside the demand of Rs. 1,44,96,485/- and 4,32,156/-. 14. In respect of the confirmed d....